The maximum price for a put option is:
A) the stock price.
B) the strike price.
C) the intrinsic value.
D) the stock price minus the strike price.
E) There is no upper limit for a put price.

Question

Quizplus · Accepted Answer

The maximum price for a put option is the strike price. This is because a put option gives the holder the right to sell the underlying asset at the strike price. In the most extreme case, if the stock price goes to zero, the put option's value cannot exceed the strike price, as this would be the total value the option holder could gain by exercising the option.

The Maximum Price for a Put Option Is